Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Philippines teaches Davos Man.
Manila's journey from basket-case to investment darling has been fascinating to observe. But a teacher of the Davos set? In this op-ed, Finance Secretary Cesar Purisima makes the case for good governance as his government sponsors the this year's World Economic Forum event in Asia. "Reforms have the power to alter a country’s economic destiny," Purisima writes. "This is why they inspire confidence from markets, businesses and citizens. The Philippines provides an example of how reforms can change perception and reality." It does indeed. Just so long as Purisima and his boss President Benigno Aquino remember that their own push to revive the economy and attack corruption are very much a work in progress.
Bank of Japan holds fire -- for now.
Haruhiko Kuroda refrained from adding more stimulus to the economy and raised his outlook for business investment. The BOJ governor is too optimistic about Japan's ability to weather the impact of the first sales-tax increase since 1997. The 3 percentage-point hike is likely to depress already underwhelming consumer spending and make it harder for Kuroda to chase his 2 percent inflation target. Expect him to double down on the BOJ's record stimulus increase of one year ago. Let's just say it's going to be a busy summer for Japan's central bank as gross domestic product disappoints.
Cooler heads prevail in Vietnam.
A recent slew of terrible international headlines clearly made an impression on officials in Hanoi. It's good to see cooler heads prevailing after violent anti-China protests prompted economists to question whether Vietnam risked damaging its status as a regional manufacturing hub. Vietnam's quick efforts to restore calm should tamp down such speculation -- for now. Of course, things could blow up anew at any moment if China insists on drilling in disputed waters in Vietnam and beyond. Stay tuned.
Why Putin and Xi will be fast friends.
As Vladimir Putin searches for friends in a world grown tired of his antics, no target is more important than China's Xi Jinping. Getting the Chinese president on board Putin's geopolitical and economic platforms would be a huge boon for the Russian president. Here, Time magazine's Michael Schuman explains why seeking Xi's friendship is about more than just economic necessity, with a new world order in prospect.
Choosing between growth and sustainability.
Greenspan or green growth? That's how Simon Zadek of the United Nations Environment Program frames one of the biggest debates of our time: whether the rapid growth with which former Federal Reserve Chairman Alan Greenspan's name is synonymous is compatible with sustainability. Balancing these two pursuits will be hugely destabilizing to the financial status quo. Zadek concludes it "will require, first and foremost, a massive push by policymakers to reduce greenhouse-gas emissions over the next 15 years. At the same time, investors and businesses will have to adjust to the new policy environment by disentangling themselves from carbon-intensive assets." Good luck with that!
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